China's central bank said it would slash the amount of cash that banks must hold as reserves, releasing a total of 900 billion yuan ($126.35 billion) in liquidity to shore up the flagging economy.

Weaker-than-expected payroll growth in August hinted at a slowing U.S. economy, helping cement expectations of an interest rate cut by the Federal Reserve later this month.

Speaking at the University of Zurich, Fed Chairman Jerome Powell said the labor market was strong and the central bank will continue to "act as appropriate" to sustain economic expansion. He also said the United States and the world economy are not likely to fall into recession.

The Labor Department's nonfarm payroll data showed the economy added 130,000 jobs in August, below expectations of a gain of 158,000, according to a Reuters survey of economists.

However, average hourly earnings gained 0.4% last month, the largest increase since February, raising hopes that healthy consumer spending could put inflation on track to meet the Fed's target.

"If the Fed is bent on becoming more dovish, the jobs data coming in shy of expectations feeds into that narrative and if they want to become more neutral, the wage inflation increasing above expectations strengthens that narrative," said Keith Buchanan, portfolio manager at Globalt in Atlanta.

"There's something to take for everyone from this report, not only among market participants, but for those from within the Fed as well."

Even though poor August factory data and tit-for-tat tariffs caused a turbulent start, Wall Street's major indexes were on track for their second straight week of gains.

Easing political tensions in Hong Kong, hopes of a de-escalation in the U.S.-China trade dispute, strong growth in August private payrolls and an accelerating services sector boosted stocks to one-month highs this week.

The benchmark S&P 500 is now just 1.66% away from its record high hit in July and is on track to recover its losses from August.

The communication services sector was the biggest drag among the 11 major S&P sectors, as Facebook Inc slipped 2.05% after U.S. state attorneys general said they would investigate if the social media giant stifled competition and put users at risk.

At 13:12 ET, the Dow Jones Industrial Average was up 94.30 points, or 0.35%, at 26,822.45, the S&P 500 was up 5.11 points, or 0.17%, at 2,981.11 and the Nasdaq Composite was up 1.36 points, or 0.02%, at 8,118.18.

Among other stocks, Boeing Co rose about 1.1% and was the biggest boost to the Dow Industrial.

Advancing issues outnumbered decliners by a 1.78-to-1 ratio on the NYSE and a 1.32-to-1 ratio on the Nasdaq.

The S&P index recorded 49 new 52-week highs and no new lows, while the Nasdaq recorded 52 new highs and 35 new lows. (Reporting by Uday Sampath in Bengaluru; Editing by Anil D'Silva and Arun Koyyur)